Ferrari's ambition to minimize its impact on the global environment is outlined in the Environmental Practice, which is inspired by the guiding principles set forth in the Code of Conduct and defines Ferrari’s main ambition to foster a corporate culture dedicated to environmental protection. The Practice applies to the entire Ferrari Group. Ferrari considers environmental protection to be a decisive aspect to be promoted in its overall approach to business and it aims to continuously improve the environmental performance of its operations and comply with the provisions contained in applicable laws and regulations. For this reason, Ferrari aims to: reduce greenhouse gas emissions across the product life cycles, minimize water use, promote the reuse of waste materials in the production process, monitor emissions into the atmosphere and the sewage system, and contribute to the protection of biodiversity in areas impacted by its production process. The Environmental practice sets out key principles: compliance with applicable regulatory and legal requirements, periodic and systematic establishment of improvement objectives and their monitoring and measurement through KPIs, the development of products that meet customers’ needs while ensuring respect for the environment, and the adoption of the best available technologies for the efficiency of production processes and the reduction of emissions and environmental impacts. The practice promotes, among others, the improvement of energy efficiency and the use of renewable energy aimed at mitigating climate change. In particular, it enshrines the Company’s commitment to monitor and reduce greenhouse gas emissions produced throughout the entire product life cycle, as well as reducing energy consumption. In line with the Environmental Practice commitments, we have developed the decarbonization strategy, which is reported in our 2022-2026 Strategic Plan. The practice covers the following IROs: “Energy consumption and related GHG emissions for upstream activities (e.g. raw material purchase and inbound logistics) (Scope 3) with negative impact on climate change”, “Energy consumption and related GHG emissions for downstream activities (e.g. outbound logistics, vehicles usage and use of sold products) (Scope 3) with negative impact on climate change”, “Energy consumption and related GHG emissions for our operations (Scope 1 / Scope 2) with negative impact on climate change and the community (e.g. Maranello)”, “Difficulties in targeting Ferrari Carbon Footprint strategy related to Scope 3 Indirect Emissions with main focus on Upstream”, “Energy efficiency - Using renewable energy at a reduced cost plus investing in low carbon technologies that could result in lower carbon footprint, lower energy consumption and lower energy costs”. The monitoring and management of the environmental performance of our production plants is assigned to a team that reports to our Chief Technologies & Infrastructures Officer. Their effort is aimed at minimizing the impact of our activities on the environment, particularly in relation to the energy consumption of our production facilities. For the achievement of GHG emission reduction targets by 2030, the Green Sustainability Steering Committee, composed of representatives from different functions, has been appointed as the responsible body. Specifically, within the Research & Development department, a team is responsible for future product development aiming at reducing CO2 emissions of Ferrari sports cars, among which the future full electric powertrain. Meanwhile, another team is in charge of overseeing regulatory developments while monitoring the emissions of Ferrari cars. In addition, the Research & Development, the Product Development and the Purchasing & Quality departments are working with our suppliers to find solutions to meet our target of 30 percent reduction per car of our Scope 3 upstream emissions. These departments report to the Chief Research & Development Officer, the Chief Product Development Officer and the Chief Purchasing & Quality Officer, respectively. Please refer to the “ESRS 2—General disclosures—Our Decision-Making Process” section for information on accountability and the most senior levels responsible for Climate Change issues. To draft the Environmental Practice, the interests of stakeholders have been considered at a general level, particularly those identified as the addressees of the Practice. Ferrari considers the engagement of its suppliers and its sales partners, as well as the local authorities and communities, to be crucial to uphold its environmental principles and commitments. At present, our Environmental Practice does not cover adaptation to climate change.